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The Dynamic Effects of Information on Political Corruption: Theory and Evidence from Puerto Rico

Author

Listed:
  • Gustavo J. Bobonis
  • Luis R. Cámara Fuertes
  • Rainer Schwabe

Abstract

Does the disclosure of information about corrupt activities induce a sustained reduction in corruption? We use longitudinal data on audits of municipal governments in Puerto Rico to answer this question. We find that corruption is lower in municipalities audited before an election. However, these municipalities do not exhibit decreased levels of corruption in subsequent audits. Mayors in municipalities audited preceding the previous election have higher re-election rates, suggesting that audits enable voters to select more competent politicians. We present a political agency model that rationalizes the observed short-term and dynamic effects of information on corruption and re-election rates. We conclude that audit programs must be timely, sustained, and long-term commitments in order to be effective.

Suggested Citation

  • Gustavo J. Bobonis & Luis R. Cámara Fuertes & Rainer Schwabe, 2012. "The Dynamic Effects of Information on Political Corruption: Theory and Evidence from Puerto Rico," Working Papers 2012-14, Banco de México.
  • Handle: RePEc:bdm:wpaper:2012-14
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    References listed on IDEAS

    as
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Audits of municipal governments and corruption (Puerto Rico)
      by UDADISI in UDADISI on 2013-01-23 16:49:00

    More about this item

    Keywords

    Corruption; information; political agency.;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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